When you’ve decided to get an electric vehicle, you might be asking yourself whether you should purchase or lease. Each option has its own set of pros and cons. Depending on your budget and lifestyle, one may be better for you than the other.
The short answer is yes. You can get up to $7,500 in federal tax credits depending on the type of electric vehicle or plug-in hybrid you purchase. In addition, you may also qualify for up to $7,000 in rebates from the California Vehicle Rebate program for qualified low-income individuals. It may be more advantageous to lease a vehicle if your expected income tax is too low to use the federal tax credit, as the credit can be passed onto the dealer who may indirectly offer a lower lease price to you.
As technology rapidly improves, leasing has become a popular and cost-effective method of driving electric. By leasing a car, you can upgrade to a newer model with better improvements, such as longer range and greater battery capacity, more easily by switching vehicles after each lease. Leasing also helps protect yourself against battery capacity loss since you can switch to a new vehicle after each lease and protect yourself against unknown or low resale value for used vehicles.
Leases tend to have restrictions on the mileage you can have on your car. If you plan on driving your electric vehicle more than 20,000 miles a year, it may be better to purchase to avoid excess mileage fees.
If you have a higher credit score, dealers will give you better offers on leases of electric vehicles and hybrids.
The majority of our clients lease their cars. The main reason for this is quickly improving technology and battery range. The same model EV you purchase today will have significantly improved battery range in 3 years which will take you twice as far. Knowing this, many EV drivers decide to lease for 36 months, then trade up to the next generation.
Dealerships offer a wide variety of EV leasing and purchasing plans. CURRENT EV keeps an inside track on the arrangements being offered and can let you know what all the options are.
The graph below provides the best reasons for purchasing or leasing an electric vehicle:
When we discuss the options with our clients, the majority decide to lease. A CURRENT EV advisor will analyse your budget and lifestyle needs, lay out the pros and cons of leasing and purchasing, and offer insights concerning your best choices.